These days, our lives are surrounded by a lot of uncertainty and more people are thinking about their own mortality. Many people are choosing to review and update their estate plans during this challenging time. One thing that can easily trip up an estate plan is not paying attention to how assets are owned. Titling assets in a way that does not work with your estate plan can result in additional cost to your estate or to assets being passed on in a way that does not fit with your wishes.
Here are a few examples of ways this can go awry:
- Your estate attorney recommends a revocable living trust so that your assets do not need to go through probate and to provide for the management of these assets in case of your incapacity. After you set up the trust, your attorney informs you that you need to retitle your assets in the name of the trust. You intend to do this, but you are extremely busy with other matters in your life and don’t get around to doing it. If you die before you retitle the assets, they will most likely have to go through probate, costing your estate money and your loved ones time as well as exposing your assets to public scrutiny. If you become incapacitated before retitling the assets, this would likely lead to undue delay in the management of those assets. Taking the time to retitle the assets before your death or incapacity would have provided the promised benefits with your trust.
- In your will, you state that your assets are to be split equally among your three children. You have several bank accounts and your oldest child is listed on some of these accounts for convenience purposes in case something happens to you. When the bank asks if you would like your oldest child to be a joint owner, you say yes. In doing so, you have unwittingly compromised the terms of your will. When property is owned jointly (also known as “joint with right of survivorship”), that property goes directly to the other owner upon death, bypassing the terms of your will. Although you intended to leave your property equally to your children, a disproportionate amount would be left to your oldest child instead.
These are just two examples of ways that mistitling assets can have negative ramifications. It is key that you title your assets to work with your estate plans and not against them.
For assistance creating or updating estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.